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The consumer

Consumer Profile
With a GDP per capita of USD 2,370 (IMF, 2021), Ghana is a relatively rich country compared to the rest of West Africa and has one of the highest growth rates in the regions (6.5% in 2019 before the COVID-19 pandemic according to the IMF). The country boasts a sizeable consumer market with a population of 30.78 million (IMF, 2020). Ghana is also one of the most densely populated countries in Africa. Ghana also has a very young population with a median age of 21 years (CIA Wolrd Factbook, 2020 est.) and an urban population much higher on average than most African countries (56.7% of the population live in urban areas compared with the Sub-Saharan average of 40.7% - World Bank, 2019 latest data available). The young generation is educated (with a youth literacy rate exceeding 90% against 79% for the adult population - World Bank, latest data available) and attracted to foreign products and show a broader interest in shopping in general.
Consumer Behaviour
Ghana's rapid economic growth, spurred by political stability, high gold and cocoa prices and oil revenue, has transformed its retail market. Affordability and trust are the two main criteria that determine the purchase decisions of Ghanaians. Compared to other African countries, Ghanaian consumers are more receptive to advertisements and show a stronger interest in promotions and attractive packaging. They are also more willing to try new brands and are better connected with the media (Nielsen Survey). As the retail market became more sophisticated, Ghanaians have grown to appreciate foreign products, especially clothing and pharmaceuticals. That being said, supermarkets and modern retail outlets have difficulty gaining a foothold, as traditional channels such as container shops and roadside kiosks maintain their strong position.
Consumers Associations
Consumer Advocacy Centre Ghana
Consumer Protection Agency Ghana
 

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Importing & Distributing

Import Procedures
The following documents are required for goods entering Ghana:

  •     Bill of lading;
  •     Certificate of origin;
  •     Commercial invoice;
  •     Customs Packing list;
  •     Insurance bond;
  •     Import declaration; and
  •     Technical standard/health certificate

The clearance and shipping of goods are processed through a single-window portal called GC-Net. Additional procedures apply to rice, medicine, auto spare vehicle and vegetable oil imports.

Distribution market players
While the informal market dominates the retailing industry with small and local merchants, international companies, particularly South African or Pan-African brands are also present in the country. South African mass retailers and supermarkets such as Massmart, Shoprite, Edcon and Woolworths have stores in the country whereas Famous Brands, Africa's largest branded food service franchiser, entered the market in 2017.
The food distribution sector in Ghana has experienced impressive growth recently. In terms of retail food outlets, supermarkets account for 4% of the industry whereas convenience stores represent 36% and traditional markets the remaining 60% (USDA, latest data available). Traditional markets retain their dominant position as importers and distributors prefer doing business with buyers from these markets who tend to make instant payment for deliveries. Hotels, restaurants and industries also tend to get their supplies from traditional markets.

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Operating a Business

Type of companies

Limited Liability Company (LLC)
Number of partners: Two directors (one Ghanaian resident) and one shareholder (any nationality) minimum
 
Capital (max/min): USD 500,000 for a wholly foreign-owned company, USD 1 million for a trading firm. Foreigners investing in a joint venture are required to make a minimum contribution of USD 200,000
Shareholders and liability: The liability of the partners is limited to the initial investment.
Public Limited Company (PLC)
Number of partners: Between two and fifty
Capital (max/min): USD 500,000 for a wholly foreign-owned company, USD 1 million for a trading firm. Foreigners investing in a joint venture are required to make a minimum contribution of USD 200,000
Shareholders and liability: Liability is limited to the shares.
Partnership
Number of partners: Minimum two, maximum twenty
Capital (max/min): No minimum capital required
Shareholders and liability: Liability is unlimited for active partners, limited for sleeping partners.
Unlimited Liability Company
Number of partners: Minimum one
Capital (max/min): No minimum capital required
Shareholders and liability: Liability is unlimited.
 
Setting Up a Company Ghana Sub-Saharan Africa
Procedures (number) 8.0 7.5
Time (days) 13.0 21.3

Source: Doing Business - Latest available data.

 

Cost of Labour

Minimum Wage
In 2020, the National Tripartite Committee (NTC) increased the daily minimum wage to GHS 11.82.
Average Wage
The average salary varies between GHS 800 and GHS 1,000 depending on the sector and location (latest data available).
Social Contributions
Social Security Contributions Paid By Employers: The employer must contribute 13% of an employee's basic salary to the Social Security and National Insurance Trust.
Social Security Contributions Paid By Employees: The employee contributes 5.5% of their salary to the Social Security and National Insurance Trust.
 

Intellectual Property

National Organisations
Visit this page to find contact information for the Copyright Department of the Ministry of Justice.
Regional Organisations
Copyright Department of the Ministry of Justice is a member of both African Regional Intellectual Property Organization (ARIPO) and World Intellectual Property Organisation (WIPO)
 

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Tax Rates

Consumption Taxes

Nature of the Tax
Value added tax (VAT)
Tax Rate
12.5%
Reduced Tax Rate
Exports of goods and services, as well as goods and services supplied to Free Zone Enclaves or a Free Zone Company, are zero-rated.
Supplies of wholesalers and retailers of goods are taxed at a flat rate of 3%.
Exempt items include: unprocessed agricultural and aquatic products in their raw state, including agricultural and aquatic food products that undergo preservation such as freezing, chilling, smoking, stripping, polishing, etc.; domestic transportation by bus and similar vehicles, and by train or boat; medical services and supplies; agricultural inputs, animals, livestock and poultry; provision of accommodation in a residential property.
Other Consumption Taxes
Excise duties are levied on the following goods: bottled water (17.5%), malt beverages (between 2.5% and 17.5%), beer (between 10% and 47.5%), spirits (between 0% and 25%), tobacco products (175%). A special 2% tax on imports applies to certain products in addition to VAT. An African Union Import Levy of 0.2% on the CIF value is levied on imports from Non-African Union Countries.
A national health insurance tax and the Ghana Education Trust Fund Levy of 2.5% each are levied on goods and services in addition to VAT, together with the COVID-19 Health Recovery Levy (1%).
 

Corporate Taxes

Company Tax
25%
Capital Gains Taxation
Ghana does not levy a separate capital gains tax; therefore, gains derived by a company are added to business income and are taxed at the standard corporate tax rate.
Main Allowable Deductions and Tax Credits
Depreciation of assets does not yield an allowable deduction when calculating taxable profits. It is replaced by capita allowances at statutory rates varying between 10% and 50%. The tax law does not provide for an explicit deduction of start-up expenses; however, they are usually deductible when they are wholly, exclusively, and necessarily incurred in the production of income. Interest expenses are ordinarily deductible, except in the case of restrictions that apply to thin capitalisation. Bad debts are usually deductible if the taxpayer proves they have taken all steps to pursue payments. Bad debts are not deductible if there is a 50% or more change in underlying ownership.
Charitable contributions to organisations or funds, scholarship schemes and rural or urban development programmes approved by the government qualify for deduction. COVID-19 donations are considered deductible expenses for income tax purposes.
Fines, penalties and taxes are usually not deductible for tax purposes.
Net operating losses can be carried for the three years immediately following the year in which the loss was incurred (up to five years for certain priority sectors). Carryback of losses is also permitted for taxpayers obtaining income relating to a long-term contract (except when there is a 50% or more change in underlying ownership).
Other Corporate Taxes
A Communication Services Tax (CST) is levied at a rate of 5% payable by both individual users and companies providing electronic communications services provided by service providers other than private electronic communications services.
National Health Insurance Levy (NHIL) and Ghana Education Trust Fund Levy (GETFL) at a rate of 2.5% each are levied on the supply of goods and services provided in Ghana, the importation of goods and imported services. These items are also subject to the newly established COVID-19 Health Recovery Levy (CHRL), at a rate of 1%.
Social security contributions payable by the employer amount to 13% of the salary.
A stamp duty is levied at rates ranging from 0.25% to 1% and from GHS 0.05 to GHS 25, depending on the type of transaction and the instrument. A capital duty of 0.5% is levied on the initial stated capital and any subsequent increase in the stated capital.
Property tax is levied by the relevant District Assembly/Municipal Authority at varying rates depending on the location.
Other Domestic Resources
Ghana Revenue Authority
Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.
 

Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
See the list of Tax Conventions signed by Ghana
Withholding Taxes
Dividends: 8%, Interests: 0%/8%, Royalties: 15%.

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